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Welfare Reform. David Gray Welfare Rights Manager Peter McCann Head of Revenues and Benefits and Customer Services. Overview of presentation. 1) Welfare agenda Dave 2) Changes from April Peter 3) Longer term changes Dave. Royal Assent 8/3/12

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Welfare Reform

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Welfare reform

Welfare Reform

David Gray

Welfare Rights Manager

Peter McCann

Head of Revenues and Benefits and Customer Services

Overview of presentation

Overview of presentation

  • 1) Welfare agenda Dave

  • 2) Changes from April Peter

  • 3) Longer term changes Dave

Welfare reform act 2012

  • Royal Assent 8/3/12

  • Biggest Change to welfare system in 60 years

  • Stated intentions of Government

    • – Make work pay

  • - Protect the vulnerable

  • - Fair to tax payers

  • - Fair to benefit claimants

  • Welfare Reform Act 2012

    Expenditure savings

    Expenditure savings


    • Universal Credit

    • Housing Benefit Reform

    • Abolition of Council Tax Benefit

    • Personal Independence Payments (PIP)

    • Employment Support Allowance

    • Enhanced benefit sanctions


    Welfare reform


    1. Bedroom Tax

    2. Discretionary Support Scheme

    3. Council Tax Reduction Scheme

    4. Discretionary Housing Payments

    5. Benefits Cap

    6. Council Tax Empty Property Charge

    Welfare reform

    Bedroom Tax

    Bedroom tax

    Bedroom Tax

    One bedroom calculated for each of the following:

    • A single claimant or every adult couple

    • Any single adult aged 16 or over

    • Any two children under age 10

    • Any two children of the same sex aged up to 15

    • Any other child (other than a foster child or child whose main residence is elsewhere)

    • A non-resident overnight carer

    Housing benefit bedroom tax

    • Housing Benefit is reduced by making a reduction to eligible rent

      • 14% one room (2,000)

      • 25% two rooms (600)

    • 2,600 households affected

    • Total Housing Benefit reduction is £1.8m

    Housing Benefit – Bedroom Tax

    Housing benefit bedroom tax1

    Housing Benefit – Bedroom Tax


    • Temporary accommodation

    • Supported accommodation

    • Claimant or partner qualifies for state pension credit


    • Recent bereavement – 12 months

    • New claim – 13 weeks

    What is halton bc doing

    What is Halton BC doing?

    • Supplied lists to RSLs of households affected

    • December 2012 - Council wrote to claimants informing of under occupancy

    • Number of bedrooms & household composition

    • Amount of Housing Benefit reduction

    • Claimants requested to inform HBC if household composition is incorrect

    • Over night care cases identified

    • Disabled adaptations identified

    Non dependants

    Non Dependants

    • Where are they?

    Welfare reform

    Discretionary Support Scheme

    Welfare reform

    • From April 2013 the Discretionary Social Fund will end

    • From April Halton Council has a new scheme which may or may not be able to help you

    • Not a like for like replacement


    • As a result of the Welfare Reform Bill, the national Discretionary Social Fund, currently administered by DWP, will be disbanded from April 2013

    • Crisis Loans for general living expenses and Community Care Grants will be replaced by new local assistance schemes to be administered by Local Authorities

    • Expected that the grant to LAs will be based on the equivalent social fund spend 2012-13 (£178m) But Halton £100k down on 2011/2012!

    • Will be non-ring fenced

    • No new statutory duties to provide local scheme


    Welfare reform

    Changes to the Social Fund Scheme from April 2013

    • Regulated scheme

    • Sure Start Maternity Grants

    • Funeral Payments

    • Cold Weather Payments

    • Winter Fuel Payments

    • Discretionary scheme

    • Budgeting Loans

    • Crisis Loans

      • -Alignment Payment

      • -General living expenses

    • Community Care Grants

    Remains with DWP

    Locally designed & administered provision

    Awards 2011 12

    Awards 2011/12

    Welfare reform

    • No cash

    • Freephone number

    • List of considerations reduced

    • Online applications for support in community

    Key message

    Key Message

    • Discretionary Social Fund now no longer exists

    • Halton Council may be able to help you

    Council tax support scheme abolition of council tax benefit from april 2013

    Council Tax Support Scheme(Abolition of Council Tax Benefit from April 2013)

    Welfare reform

    Current Position

    Expenditure:Housing Benefit £52mCouncil Tax Benefit £11mCaseload:Housing Benefit 13,014Council Tax Benefit 15,305

    Current council tax benefit scheme

    Council Tax Benefit caseload & expenditure

    Current Council Tax Benefit Scheme

    Welfare reform

    Current Position

    • Demand led

    • Funding- Councils are reimbursed 100% of the full amount of Council Tax Benefit paid out correctly

    • From April 2013 Council Tax Benefit will be abolished and replaced by a locally designed scheme

    Welfare reform

    A Local Scheme - BUT…..

    • New local scheme should:

    • Protect pensioners ( 41% of Halton’s benefit caseload are pensioners)

    • Take into account vulnerable groups – responsibilities regarding child poverty, the disabled, homelessness and equalities

    • Incentivise people to work

    • But:

    • There will be a 10% reduction in funding (equates to £1.4m in Halton)

    • The pensioner protection increases the burden to around 18% for working age claimants

    • Any expenditure above the cash specific sum must be met pound for pound by LA

    • The more people protected the higher the burden

    Welfare reform

    The Scheme

    • Reduction in non pensioner benefit of a % amount to be deducted at the end of the calculation

    • The % amount to be determined by Members each year once the grant details have been received

    • For 2013/2014 it will be 21.55%

    Welfare reform

    The Scheme

    • The % reduction ensures that the cut is shared equally

    • Retaining present system ensures the in-built protection for various groups is maintained

    • Small sums will be billed ( poll tax)

    • Average between £2 & £4 per week

    • People billed for the first time

    Welfare reform

    General Issues

    • Increased cost of recovery

    • Small amounts soon become big

    • Difficulty in gauging future demand & subsequent financial impact

    • 3 schemes will be operating

    • Confusion

    • Have written to 9,000 households at the start of the year

    Key message1

    Key Message

    • Don’t ignore the Council Tax Bill

    • Get in touch with the Council

    Welfare reform

    Benefits Cap

    Benefit cap

    • As part of the Welfare Reform Bill, a cap on the maximum amount working- age households can claim in benefits will be introduced from April 2013 (now summer 2013)

    • This is to prevent claimants receiving more income from benefits than the average wage paid to those who are working.

    • The cap is set at £26k per annum (£500 per week for households with children or £350 per week for single claimants without children).

    • Some benefits are excluded such as Working Tax Credits and Disability Living Allowance.

    • Department for Work and Pensions (DWP) have written to all households that they think may be affected.

    • DWP have identified 104 households in Halton that may be effected (have incomes of between £26k and £46k).

    • DWP have wrongly identified some clients as being effected.

    Benefit Cap

    Benefit cap1

    • Until the implementation of Universal Credit, the cap will be applied to Housing Benefit

    • Owner Occupiers will not be effected until transfer to Universal Credit

    • Claimants likely to see it as a reduction in Housing Benefit rather than a reduction in overall benefits

    • Have written to 100 people

    Benefit Cap

    Welfare reform

    Discretionary Housing Payments

    Welfare reform

    Discretionary Housing Payments

    • Amount increased from £87k to £282k

    • Bedroom Tax alone is £1.8m shortfall

    • Publicity states that this will be the safeguard!

    Welfare reform

    Council Tax

    Council tax

    Council Tax

    • Changes to charges for Empty Properties

    • Change to charges for Second Homes

    • Everyone currently receiving exemptions have been notified

    Welfare reform

    Final Message

    • Impact on individuals - Social Fund/Bedroom Tax/ CTRS – which do I pay?

    • Impact on Halton’s wider community- (less money in economy)

    • Collection issues for Council/RSLs

    • Confusion & uncertainties for everyone as Government amends legislation

    • ‘It won’t affect me’ syndrome - £100m reinforces this

    • Capacity issues of Council as its all in one area

    • Get in touch

    Current system reformed system

    Income related JSA

    Income related ESA

    Income Support (inc SMI)

    Working Tax Credits

    Child Tax Credits

    Housing Benefit

    Universal Credit

    Current System Reformed System

    Disability Living Allowance

    Personal Independence Payment

    Pension Credit, Child Benefit, Carer’s Allowance (will remain)

    Council Tax Benefit ( to be replaced)

    Contributory JSA and ESA ( now has 52 week limit)

    Universal credit

    • Single means tested benefit

    • Payable in or out of work

    • Initially for new claimants- stock transfer to follow

    • Oct 2013 for new claims, April 2014 to start transfer ( by Oct 2017)

    • Transitional Protection

    • Pilots being undertaken

    • Digital agenda

    Universal Credit

    Universal credit1

    Universal Credit

    Universal credit risks impacts

    Universal Credit – Risks/Impacts

    • Universal Credit will be paid directly to the customer.

    • Customer will need a bank account. (preferably one that will accept Direct Debits for rent payments.)

    • Will be paid monthly in arrears and to one person if part of a couple.

    • As yet still no definition of ‘vulnerable’ for payment to go to landlord.

    Potential substantial risk for increase in rent arrears

    Personal independence payment pip

    • PIP

    • Replaces DLA for new claimants of working age from April 2013

      • -10,600 benefit claimants in Halton on DLA

    • Points based

    • Many currently entitled to DLA would not get PIP

    • Intention is to save money

    • Disproportionate effect on Halton

    • North West pilot

    Personal Independence Payment (PIP).

    Welfare reform


    Wider reforms

    • Tax Credits

    • Eligibility criteria made harsher

    • Employment Support Allowance

    • Existing Incapacity claimants to be assessed against harder criteria for ESA.

    • Substantial proportion move onto Job Seekers Allowance

    • Child Benefit Reform

    • Restrictions for Higher Rate Taxpayers

    Wider Reforms

    Summary of welfare reform

    • A lot covered very briefly and very complex

    • Deserves more detail

    • Full detail of changes not yet available

    • Intentions – saving money

    • - less generous to benefit claimants

    • Help available through Welfare Rights Service (tel: 0151 511 8930)

    Summary of Welfare Reform

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